At Issue
Congratulations ... It's a Budget!
Governor Signs 1997-99 State Budget Bill
By Jennifer Boese
Running three months over schedule, undergoing thousands of votes and
hundreds of changes, the State Legislature finally has completed its
work
Income Tax Changes in Budget Bill
-
Income tax rate reduced by 1 percent beginning 1998;
-
Standard deductions/tax brackets indexed for inflation starting
1999;
-
Married couple tax credit increased;
-
Working families tax cut - couples making less than $18,000;
-
Long-term care tax cut - insurance premiums to be 100 percent
deductible starting 1998.
on the budget bill. That budget, born Feb. 12 when introduced by Gov.
Thompson, was scheduled for completion by July 1. But the budget bill
was not signed into law until Oct. 11.
The final budget document differs in part from the governor's
proposed budget. Notably absent are "truth in sentencing" and child
support reforms. Viewed as substantive policy issues, these two items
were removed from the budget early on with the intent of introducing
them as separate pieces of legislation. While these and other
initiatives failed to "make the cut," hundreds of other items did.
The 1997-99 Biennial Budget focuses on education, health care and
transportation, but the cornerstone issue is income tax reduction. The
income tax changes include indexing for inflation, eliminating the
marriage tax penalty and a working families tax reduction. Tax changes
also include adopting federal "check-the-box" regulations regarding the
taxability of single-owner entities, and extending the Manufacturer's
Sales Tax Credit for fuel and electricity to all business entities (that
is, LLCs, LLPs and SCs), not just regular corporations.
Education reforms also play a significant role as the state will
continue its two-thirds funding commitment for public education. Also
provided is $204 million in grants and loans to purchase education
technology equipment and training under the TEACH initiative. A Public
School Choice component allows parents to send their children to any
public school in the state, and academic learning standards will be
implemented for K-12 in English, language arts, math, science and social
studies.
New health-care reforms for low-income families are created under
"Badger-Care," a state/federally funded insurance program offering
Medicaid benefits. Nearly 50,000 low-income families will be eligible
for this program. A Women's Health initiative will provide health
information and services to targeted women and their children.
This budget contains a state transportation budget. The issue has
engendered significant debate in the past, but this Legislature agreed
on funding mechanisms. A $5 increase for vehicle registrations, a one
cent increase in the gas tax and a temporary license plate requirement
are all included. In addition, the state highway rehabilitation program,
local road improvement, general transportation aids and elderly and
disabled transportation each will receive at least a 10 percent funding
increase.
Sandwiched between all the major items are many others of interest.
Here is a sampling:
- eliminates Legislative Reference Bureau drafting privileges for 11
organizations, including the State Bar, that have drafting privileges
but that are not a part of state government;
- allows chiropractors to establish a lien for services to any person
sustaining personal injuries as a result of negligence, wrongful act or
tort of any other person. Vetoed by the governor;
- provides additional $15 million for 1,000 prison beds;
- requires the Director of State Courts to complete a prison impact
statement to determine what fiscal effect new legislation will have on
the corrections system. Vetoed by the governor;
- revives Drug Tax Stamp Law, bringing Wisconsin law in line with
recent U.S. Supreme Court ruling;
- provides funding for 14 assistant district attorney positions
throughout Wisconsin;
- allots an additional judge for Oconto County;
- establishes criminal background and abuse checks on caregivers;
- provides that custodians of public records are not required to
notify individuals before their records are supplied to a requester.
Vetoed by the governor;
- increases justice information assistance fee from $5 to $7;
- reforms W2 child care copayments based on income and number of
children, and increases cash grants for W2 participants;
- restores lottery tax credit that was ruled unconstitutional;
- increases cigarette tax by 15 cents;
- establishes brownfields grant program to help clean up abandoned and
contaminated properties;
- retains state-funded recycling program through 2000; business
recycling tax will sunset April 1, 1999, with state commitment to fund
through 2004;
- provides post-adoption funding;
- approves state's takeover of the Milwaukee Child Welfare
System;
- modifies federal Health Insurance Portability and Accountability Act
of 1996;
- requires increase to salary component of qualified economic offer by
amount of fringe benefits realized by school district employer. Vetoed
by governor; and
- keeps prevailing wage responsibility in Department of Transportation
for DOT projects.
Jennifer Boese is a State
Bar government relations coordinator. For more information, she can be
reached at (800) 444-9404, ext. 6045.
Wisconsin
Lawyer